4.4. A review of the first and second revised LDRRMFIPs showed additional
appropriations. However, there were no corresponding numerical or narrative
disclosures in the Notes to FS to reflect these adjustments.
4.5. The Notes to FS provide explanatory details on accounts and accounting policies
that enhance the relevance, clarity, and transparency of the financial statements. As
the preparation of the FS, including the Notes, is the responsibility of Management,
it must be carried out with due diligence and accuracy, both in form and substance.
4.6. We recommended that, henceforth, the Municipal Accountant take into
account the budget revisions made during the year to ensure that the current
year appropriations for the LDRRMF are accurately disclosed in the Notes to
FS as of December 31.
4.7. The Municipal Accountant submitted an updated disclosure that includes the
previously omitted amounts, along with the resolutions and reports used as the basis
for the final amount.
Time Deposits
5. The Municipality inappropriately invested a total of ₱89,492,517.47 in time deposits
without proper compliance with COA Circular No. 92-382, as the funds under the
General Fund (GF) did not qualify as idle and documentary support for Land Bank
of the Philippines (LBP) placements was lacking, thereby rendering its propriety
doubtful.
5.1. Section 21 of COA Circular No. 92-382 dated July 3, 1992, states that provinces,
cities, and municipalities may deposit idle funds from the General Fund into time
deposit accounts with authorized depository banks, subject to prior authorization
from the local sanggunian and the approval of the local chief executive.
5.2. Moreover, Section 22 of the Circular defines idle funds in excess of normal
operating requirements as the level of funds an entity can freely invest in
government securities and/or fixed-term deposits. This determination should
account for provisions needed to cover regular and recurring operating expenses,
such as salaries and wages, repairs and maintenance, inventories and supplies, debt
servicing, and other obligations within the context of the entity’s cash operating
cycle. Notably, unremitted national collections and funds earmarked for obligations
to government corporations or cooperatives shall not be considered part of the idle
funds of local government units.
5.3. As of December 31, 2024, the Municipality held a total of ten time deposits totaling
₱129,492,517.47 under the account Cash-in Bank-Local Currency, Time Deposits
(CIB-LCTD), as shown on the next page.
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